Hit by a bruising price war and the goods and services tax (GST), Vodafone Group Plc’s India unit reported a 39 per cent fall in pre-tax profit at Rs 4,075 crore for the first half of the current financial year. The company also reported a 15.8 per cent fall in revenue to Rs 19,002 crore.
It blamed the poor set of numbers to the “continuing price war driven by Reliance Jio and other incumbents, seasonality, higher GST rate and the continuous capital investments”. Vodafone had posted Rs 22,579 crore in revenue, and an operational profit of Rs 6,704 crore a year ago.
Idea Cellular posted a loss of Rs 1,106.80 crore for the second quarter this fiscal. Idea Cellular has said the business was hit by pricing pressure and GST introduction in a “challenging” operating environment. The firm had reported a net profit of Rs 91.5 crore in the July-September quarter of FY17.
Airtel reported a 76.5 per cent plunge in net profit to Rs 343 crore for Q2, while RCom reported a net loss of Rs 2,709 crore. On the other hand, Jio reported a net loss of Rs 260 crore in the September quarter and exuded confidence to turn first profit by the December quarter as it had clocked an operating profit of Rs 271 crore.
Vodafone MD Sunil Sood said: “Amid continuing intense competition, we recorded a gain of 0.6 per cent in revenue market share and delivered a stable performance overall. However, we see signs of positive developments with consolidation of smaller operators.” Data usage has been growing by around 250 per cent, while enterprise business chipped in 19 per cent of revenue for the reporting period. Its data customers rose to 67.7 million, of which 44.6 million use 1MB data at 2.7GB, he said. But data users of under-1 MB fell by 5.9 per cent to 44.6 million and 3G/4G users jumped 27.9 per cent to 46 million.
Sood attributed higher data usage to rising smartphone penetration at over 38 per cent of total customer base. It added 10 million broadband users. The bottomline was hit as margins fell to 21.4 from 29.6 per cent and ARPU came down to Rs 146. It did not offer the comparative Arpu for last year.